Liver transplantation is the main treatment for acute liver failure patients; however, there is an insufficient supply of donor livers. Since transplanting hepatocytes, the main liver cell type, provides therapeutic effect and can be a bridge to transplant or recovery, scientists are working on generating replacement hepatocytes from stem cells and other cell types through reprogramming protocols. Currently, replacement hepatocytes recapitulate a subset of natural hepatocyte features, yet are still in an immature state, as they have not silenced all immature hepatocyte genes and activated all mature hepatocyte genes. Consequently, replacement hepatocytes do not perform as well as natural hepatocytes in transplant experiments. Despite these shortcomings, relatively little is known about how natural hepatic maturation is regulated, particularly at the chromatin level. We discovered extensive chromatin dynamics during hepatic postnatal maturation, including changes in H3K9me3-marked and H3K27me3-marked heterochromatin, and transcription. Heterochromatin is of particular interest, as we found that it guards cell identity by repressing lineage-inappropriate or temporally-inappropriate genes. We further classified H3K9me3- and H3K27me3-marked chromatin by compaction state with a novel assay, termed srHC-seq. In postnatal hepatocyte maturation H3K27me3-marked heterochromatin represses early maturation genes, late maturation genes, and alternative lineage genes to both regulate timing of hepatic maturation and repress alternate fates. Significantly, we identify a euchromatic H3K27me3+ promoter signature that predicts which H3K27me3-marked genes will derepress in response ablation of the enzymes that deposit H3K27me3. Disruption of either H3K9me3- or H3K27me3-marked chromatin leads to liver damage, and in the case of H3K27me3 this is likely due to the aberrant derepression of genes associated with fibrosis that normally have a euchromatic H3K27me3+ promoter signature. Our results emphasize the role of heterochromatin in regulating liver development, maturation, and fibrosis, and highlight the need to identify factors controlling heterochromatin formation and breakdown, both for the purposes of enhancing in vitro hepatic maturation and for understanding factors which predispose humans to disease.